Virgin America will halt L.A. flights from San Jose in May

The ticket counter at Virgin American is empty between flights at Mineta San Jose International Airport in San Jose, Calif. on Friday, March 14, 2014. Virgin America announced today that it will end service at the airport just one year after city and airport officials trumpeted the airline's decision to offer daily flights to Los Angeles. (Gary Reyes/Bay Area News Group)
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Gary Reyes
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SAN JOSE -- A year after local officials trumpeted its decision to begin flights from Mineta San Jose International Airport, Virgin America on Friday abruptly announced plans to halt the service in May, saying the route wasn't as profitable as it had hoped.

San Jose Mayor Chuck Reed said Virgin's change of mind wasn't a major blow to the airport, which is counting on luring new airlines -- and retaining those it has -- to pay off its recent $1.3 billion terminal upgrades.

"Of course, we don't like to lose any routes," he said. "We clearly need to grow our passenger count, and we need flights to do that so we can pay off the debt service" on the construction. But he added, "one airline on one route doesn't have much of an impact on it."

A Virgin America Airbus A320 arrives at Terminal A at Norman Mineta San Jose International Airport in San Jose, Calif. on Wednesday, May 1, 2013. Virgin America celebrated its inaugural flight from San Jose to Los Angeles with a gate-side greeting party.
( (Gary Reyes/ Bay Area News Group))

He said San Jose officials are trying to convince Virgin to remain at Mineta, by launching a new long-haul route to the East Coast.

Virgin's appearance at Mineta last year was viewed as a coup for San Jose. Although the airline cautioned at the time that it was only testing the market, Reed and local business leaders had hoped the fast-growing domestic carrier, with its reputation for low fares and innovative amenities, would gradually add service from Mineta to other cities. Reed hailed the development as "a huge step in providing better service to Silicon Valley customers."

But industry analysts warned at the time that Virgin faced intense competition flying from San Jose to Los Angeles,

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Virgin officials did not respond to this newspaper's request for an interview. But the airline, which will continue to fly out of San Francisco, noted in a statement that it wasn't earning enough from its San Jose flights to L.A.

"Unfortunately demand in the market was just not strong enough," it said. "As a result, we made the decision to move our flight capacity into more lucrative long-haul, established routes for the summer (from our home base at SFO)."

It said the L.A. flights would end on May 14.

San Jose's airport has been struggling to attract more airlines and passengers. Because of the recent recession and other factors, the number of passengers it handles has declined from 10.9 million in 2006 to about 8.8 million in 2013. While last year's passenger total was about 6 percent more than in 2012, San Jose still ranks as the Bay Area's third smallest airport behind Oakland, which had 9.7 million passengers last year and San Francisco, with 45 million.

To keep costs low, Mineta officials have eliminated more than 200 jobs, outsourced custodial and parking services, and trimmed police and fire-related costs, according to the airport's most recent annual report. Its finances remain relatively healthy, according to the credit-rating agency Standard & Poor's, which rates the airport an "A." That means the airport has a "strong capacity to meet financial commitments," according to S&P's rating system but is "somewhat susceptible to adverse economic conditions and changes in circumstances."

Mineta has 11 airlines, not including affiliates. With Virgin's decision to leave, it will be the first time in years that an airline has abandoned the airport, according to Mineta spokeswoman Vicki Day, who said Frontier and Aloha were the last to leave about eight years ago.

Despite Virgin's decision, she said, Mineta will have no shortage of flights to LA, since five other carriers also serve that route: Alaska, American, Delta, Southwest and United. "With Virgin leaving, we will still have 24 flights a day to L.A.," she said.

Day also noted that several of Mineta's airlines have announced plans to add routes to various cities in coming months. In May, Hawaiian Airlines plans to begin flying to Honolulu and Delta will add a service to Seattle, in June Alaska plans to add flight to Salt Lake and in 2015 Southwest intends to fly to Dallas, she said.